A defining MTBE liability case is scheduled to go to trial in January 2008, possibly setting the terms for the settlement of another 81 suits currently filed in the US, an attorney for the defense said April 28.
Stephen Riccardulli, an attorney with McDermott, Will and Emery, told attendees at the Society of Independent Gasoline Markets of America spring conference in Tucson that the largest of four "focus cases," filed by the Suffolk County Water Authority in New York against a number of oil companies, is scheduled to go to trial in the Southern District of New York.
The purpose of a "focus case" is to get early rulings, providing guidance for the other suits. The Suffolk suit may offer a "guidebook" for defendants to settle, he said. There are currently over 200 defendants nationwide, Riccardulli explained. Of the 82 suits filed, 12 are in California and 27 in New York, he said. It appears as if nobody is funding the suits, he added, apart from the law firms looking for a chunk of the settlements.
Briefly, the plaintiffs (mostly state and local water authorities) are charging that the leakage of MTBE, a gasoline additive banned in several states because of groundwater contamination concerns, has increased water treatment costs. Plaintiffs are claiming that MTBE is a defective product, Riccardulli said, and that oil companies conspired to get Federal Government approval for the additive, which was used as an oxygenate.
According to Riccardulli, the defense is countering that gasoline (and additives) are not intended to be released into the environment in the first place, and that the Environmental Protection Agency had approved the use of MTBE.
Because the source of gasoline (and MTBE) is difficult to trace, Plaintiffs had wanted to apply a "market share" theory of liability, which would determine the individual liability of each oil company based on that company's MTBE market share. However, Riccardulli said, a judge has ruled that "market share" theory can only be used if plaintiffs are unable to link the source of contamination to the individual companies being sued.
Calculating what the liability could be is difficult, he added, estimating "in the worst case, hundreds of millions of dollars."
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